Why I support preparer regulation (from an unenrolled preparer)

[tilt53]

From just some of the postings this week:

If they’re a C corp, can they report on a Sch. C?
What kind of questions do I need to ask for EIC?
My client has been taking 179 deductions to increase his NOL for the last 5 years. Is he at risk for an audit? Why?
Can an unmarried couple file MFJ?
How or where do I enter the ST and LT totals from a brokerage statement?
How do I calculate EIC?
How do you set up an LLC Corp?
What is the Franchise Tax fee?
How can I change the due date of a return?
Can I pay last year’s taxes on this year’s return?
When can I efile?
When can I efile without a W-2?
What credits are expiring?
Can I have the client’s refund sent to my bank account?
What kind of printer ink should I use?
Do I need to use a Sch. D or 4797 for a sale?
Where do you enter an energy credit (or property tax)?
When will the tax program be complete?

Each and every one of these questions embarrass me. I am an unenrolled preparer subject to CTEC registration. I must complete a certain number of CPE each year (I far exceed that), register and maintain a surety bond. I am so disgusted that I am going to go for my EA designation. I am a member of many forums (some of which I am more active on than others) but I learn from all. But I have to say that the ProSeries Live Community is, with the exception of several individuals, the most ignorant forum. There is truly no limit to the stupidity of those who are able to post. It is not limited to professional individuals, as it purports to be, but is open to anyone who purchases an Intuit product, such as TurboTax. These postings only show me how much regulation of preparers is needed. I have no fear of being able to past the upcoming tests, but will instead hold myself to an even higher standard.

[Koss]

Licensure and Credentials

I was an unenrolled preparer for a loooooong time. And I know some unenrolled tax pros that are very competent and qualified.

I took the EA examinations in 2008, after doing income taxes for about 20 years. I passed all three exams on the first try.

I sometimes tell people that I spent 20 years studying for those exams.

With that being said, the EA exams have remarkably broad scope, and cover some pretty esoteric stuff, like estate tax returns and large partnerships. Many unenrolled tax pros are qualified to do individual returns, but would have great difficulty preparing for, and passing, the EA exams.

The IRS proposal for a competency exam that is more limited in scope seems like a good one. It will weed out incompetent practitioners, but allow those who have developed solid experience in individual taxation to stay in business...

BMK

[tilt53]

May I contact you directly for more information?

[Koss]

Sure...

My e-mail address is at the bottom of all of my posts.

BMK

[S T]

Could it Be Called Lazy

Sandy,

I think some posters are just "tooooo" lazy to actually look up the questions you posted
It happens all the time at this time of year!

I agree it is embarrassing, and I hope that I don't post an embarrassing question, after I have posted this , if I do my apologies in advance

Sandy (the other one)

[tilt53]

S T, I have seen the same situation on the PS forum for well over a year. Most of the questions are posted from someone who has only posted 1 question and never even returns to view the answers. Frankly, it's disgusting. I continue to post there (as do several others) for the benefit of those who are trying to learn, not just looking for quick answers, We have one person (Maria?????) who also posts here who has had tremendous growth in one year. (Yeah girl, you know who you are!)

It's frustating to donate one's time, here or elsewhere, and have it mean nothing. I have learned so much from just lurking. But the main thing I learned was: look it up, do a search.

[Possi]

I agree...

I am unenrolled. I don't do accounting or corporate tax returns. I have no interest in doing either. When tax season is over, I am a private duty nurse aid and I love the 2 professions. They keep me balanced.

This year, I will probably do 400 returns, alone. Another reason I keep my scope narrow.

I am so glad that there will be some kind of designation for the work I do, some qualifications with acknowledgments. I always take continuing ed courses, traveling to forums and networking with other professionals. Last fall, I did 2 in CT and one in VA.

I never took the EA exam because I absolutely love what I do in this capacity. The EA exam covers far more with corp and estates than I deal with... I send those clients to those qualified to take good care of them!

I learn so much from this board. I ask stupid questions that sometimes lead to surprising chats! Sometimes the answer is in the book, one page (or one paragraph) farther than I read. I ALWAYS research before I ask, and I ALWAYS read the referenced material when it is given. Working alone makes me doubt myself, so I come here for reassurance that I'm doing the right thing, interpreting the law the right way. And how I appreciate the replies!

Thank you for being "my people!"

Blessings to you all and ..... "GAME ON!"

[dtlee]

Sandy,

I think some posters are just "tooooo" lazy to actually look up the questions you posted
It happens all the time at this time of year!

I agree it is embarrassing, and I hope that I don't post an embarrassing question, after I have posted this , if I do my apologies in advance

Sandy (the other one)

You are right. This time of year, some of the dumb questions are because our heads are not yet in gear and somewhere in April, from sleep deprivation or frustration, we will see them again, but there are two other ways of looking at this.

One is: at least they asked. That is a sign that they understand that their knowledge is limited or that they need to learn more. Such preparers are far less dangerous than the ones who think they don't need to know more than they already do.

Another is: all the regulation in the world won't weed out lazy tax preparers. Very often "lazy" means just doing the bare minimum. These will do enough to remain registered but will still be asking dumb questions (or like I said not asking questions) and the client will suffer.

Like Koss, I prepared taxes for nearly 20 years before becoming an Enrolled Agent and I have a friend who I would go to for advice for many of the past 30 years who only became an Enrolled Agent a couple of years ago. There are many qualified preparers who are not Enrolled Agents. Perhaps the registration efforts will help to weed some of the unqualified ones out.

[LawrenceGR]

Agree with Possi

I have been doing taxes for many years, I do what I am confident in which is 1040's. I have no desire to take on C-Corps, S-corp's, Estate or anything else. I have been unenrolled from the start, I once suggested to the IRS that they make another level of EA's that only do 1040's, I welcome the new deal and will waiting to see how it goes.

PS Koss, Good to have you back.

[Jiggers]

Studying for those exams........

I was an unenrolled preparer for a loooooong time. And I know some unenrolled tax pros that are very competent and qualified.

I took the EA examinations in 2008, after doing income taxes for about 20 years. I passed all three exams on the first try.

I sometimes tell people that I spent 20 years studying for those exams.

BMK

You never quit studying. That is the purpose of annual CPE. As an EA, the IRS now requires 24 hours/year. I usually take about 60 hours/year as 24 isn't enough!

I have a sign in my office that reads "I Don't charge for the time that it takes to do the work. I charge for the 40+ years of education and experience."

Make one to fit your practice and clients are less likely to question your fees!

Just remember that a plumber or auto repair mechanic charges more per hour than you!

[David1980]

Tax software is often sold by telling people "Oh, anyone can do taxes. The software does it for you!"

As a result, you get a lot of small time tax preparers who expect the software to do it for them. Give them a 1099-B, and they have absolutely no idea what to do with it because their software doesn't have a nice 1099-b screen to type the numbers on.

So I'm a big fan of competency tests. I am skeptical that we'll ever have a real test. I can see large very influential tax preparation companies getting into the law that their own tax training course satisfies the requirements. (I would prefer an independent competency test administered by someone other than the employer.)

[taxxcpa]

Test

The test questions will probably be things the software could handle, like:
How much is the personal exemption amount.
What is the standard deduction amount for MFJ, etc.
What is a form 1040?
Are wages taxable?

Just memorize a few figures and you are deemed qualified.

[Koss]

Testing Authority

I also believe that the competency exam should not be administered by the tax pro's employer or prospective employer. That seems like an obvious conflict of interest. The entity administering the test cannot simultaneously serve the interests of the public by testing the competency of candidates if that same entity has an employment relationship with the candidate.

Ten years ago, it would have been impractical for the IRS to attempt to administer such an exam to the large number of candidates that will register to take it. Even today, the IRS itself is far too inefficient to accomplish the task.

But they will make it happen, and I don't think they're going to hand it off to the large tax prep services.

They'll outsource the exam, just like they've done with the enrolled agent exams.

The EA exams are now administered by ProMetric. The candidate registers online, chooses a location, and just shows up. The exam is computer-based, and it's multiple-choice. When I took my EA exams, the other people in the room were taking other exams--like real estate agents, insurance agents, and securities license exams. All outsourced by the government agencies to ProMetric...

It's not the best arrangement, and it could use some improvement. When I had one minor problem--not during the exam itself, but during the registration process--the e-mail confirmation I received had the wrong date--I wound up talking to a call center in India that was not very helpful.

I know that's kind of a cliche'. I am not biased against people from other countries. But the simple fact is that they don't speak English well, and all they seem to able to do is read what they see on their screen, or read from some sort of script. They can't really answer questions or resolve problems.

So... ProMetric isn't perfect. But it's far better than the old days, when the IRS only offered the EA exams once a year, on paper.

I'm sure the new competency exam will be outsourced. Maybe not to ProMetric... they'll probably have to take bids on it.

Enrolled agents will probably help develop the exam.

BMK

[veritas]

I spoke to

a gentleman in India the other day by the nom de guerre, Sylvester.

How do they come up with their names?

[taxxcpa]

Sylvester

a gentleman in India the other day by the nom de guerre, Sylvester.

How do they come up with their names?

Probably watching the movies. He probably liked Rambo.
All the Indians tech reps are named
Jack
Joe
Bob
Willie
Jimmy
Rufus
Hyram
All good ole American names.
Not a Gupta or Patel in the bunch